Lately I have been fascinated with the concept of a theory of mind. To use the word theory in its correct scientific sense, it would be better to speak of a “hypothesis of mind” since neither one’s own mind nor other people’s minds are directly observable. Instead it is an inference. The collection of inferences then forms a working theory. Go ahead and read the link. I’ll summarize and comment further below.

Possessing such “a theory of mind” allows one to identify and attribute knowledge, beliefs, and intentions to oneself and to others. By construction everybody develops their own theory of mind.

A famous test from development psychology is the Sally-Anne test. A child is told the following the story: “Sally has a basket and Anne has a box. Sally takes a marble and puts it in her basket. Sally then leaves the room. Anne takes the marble from Sally’s basket and puts it in Anne’s box. Sally then returns to the room.” The child is then asked the following question: “Where will Sally first look for the marble?” If the child answers “In Sally’s basket”, it’s a pass. If the child answers “In Anne’s Box”, it’s a fail. Children are generally able to pass this test around age 4-5. Around this age, children realize that other people may hold different levels of information and knowledge, that is, people hold different theories of mind. If you have a toddler handy go ahead and try it out.

Can we then infer that it’s obvious to most adults that people have different theories of mind? Definitely not. While adults are not deficient on the simple level, people become increasingly more deficient the more complex the theory gets and the more it strays from their usual perspective.

Here’s an example from behavioral economics/game theory called “Guess 2/3 of the average”. You have a group of people being asked to pick the number between 0 and 100 that they think will be 2/3 of the average pick. Which number would you pick?

• 50: Sorry, you’re an idiot. You presumed that other people would pick random numbers between 0 and 100, the mean of which is 50. But you forgot to take 2/3 of that. [Also included here are any numbers higher than 66.]
• 33: Congratulations! Here you presumed that everybody else but you is an idiot and would thus on average pick 50. Hence you multiplied that by 2/3 to get 33. In short, your theory of mind is that everybody is stupid except for you. This, incidentally tends to be most people’s first answer.
• 22: So if you realize that other people think that other people are stupid, you should take 2/3 of their guess, namely 33*2/3.
• 14: But hey, realize that other people think that other people think that other people are stupid…

• 0: Taking it to it’s logical conclusion. If you deduced this, you’re very smart, but probably also very lonely. Essentially, you’re too smart for your own good, because it turns out that most other people are not so smart and will stop this chain of reasoning sooner.

So while the correct theoretical answer is 0, it turns out, that in practice it’s higher. The average tendency is for people not to pursue the chain of second-guessing the second-guessers more than a couple of steps.

We can number these fractal theories of mind as level 0 thinking (not thinking at all), level 1 thinking (presuming that other people don’t think), level 2 thinking (presuming that other people are level 1 thinkers), etc.

It turns out that when presented like that, the average person is a level 2 thinker, that is, they acknowledge that other people are capable of thinking about other people. Another way of putting it is that if I’m a level 2 thinker, I realize that your actions are probably a reaction to my action… but nothing deeper than that!

This means that everybody is has a deficient theory of mind to some degree. Some are very deficient (80% with autism fail the Sally-Anne test).

Of course, when we’re talking averages, it must always be kept in mind that baring additional information about the distribution, half are WORSE than average, while the other half is better. Worse than average means that “I don’t realize that your actions are a reaction to my action” rather “I think your actions toward me have nothing to do with me”.

Come to think of it, quite a few people are level 1 thinkers when it comes to social interactions, no?

What about investing? Do you buy stocks at random (lev 0)? Do you buy stocks because you think they will go up (lev 1)? Do you buy stocks because you think other people think they will go up (lev 2)? Do you buy stocks because you think other people think other people think they will go up (lev 3)?

People develop their theory of mind to different levels for different subjects. Developing a theory of mind is a lifelong project and those who put serious effort into can eventually become very insightful of the behaviors of others. Those who don’t develop stay at their level. Like many other abilities that take effort to develop, the difference in development eventually becomes uncorrelated with age. There are 70 year olds who are as insightful as 12 year olds.

Theories of mind become more difficult that greater the difference between oneself and the person one is trying to theorize about. For example, it is easy for an American scientist theorize/relate to another American scientist. It’s almost as easy for an American scientist to relate to a French scientist. It’s a bit harder for the American scientist to relate to an American carpenter and even harder to relate to a German carpenter—relating to a tribal fisherman is very hard.

Of course that depends on how good the American scientist is. Maybe the scientist holds a highly developed theory of mind capable of relating to or comprehending many other perspectives. Or maybe he’s a close-minded individual only capable of relating to his own experiences and thinking that everybody else must think and feel the same way.

When I talk about ERE I realize that it’s sufficiently strange to most people so as to be unreachable by their theory of mind. This is the biggest reason I resist appearing in mainstream media (I usually decline and forward the requests to other people.). My strategy is to focus on people whose theory of mind has some change of interfacing. This makes my job easier. It all goes back to the Wheaton eco scale. People in adjacent levels are relateable to you. People too far away are crazy.

Recently I steered clear of an interview request to appear in a USA Today article, which actually turned out to be quite good! However, due to the echo-chamber effect, my story got picked up by another newspaper resulting in a more typical mainstream “reaction”.

Let me illustrate some points by quoting selectively from the article:

“The story notes that those who achieve this goal often prefer to be called financially independent, a term I find to be funny, since that’s basically what I considered myself to be once I left for college when I was 18 and started paying all my own bills.”

Of course from my perspective, I find it funny that anyone who needs show up for work for a paycheck in order to pay their bills (another obligations) calls themselves “financially independent” simply because they moved away from mom and dad. They are neither independent, since they can not leave work, nor do they have any finances. Silly as this argument may seem, the problem with using words in different ways is an ancient problem. “Retirement” comes to mind. We’ve discussed this earlier on the blog; on the forum; and on other forums ad nauseum. There are people who reject any other meaning of a word than the one in the dictionary. Such are impossible to reach as their theory of mind is essentially walled off by a barrier of dictionaries.

“The problem with this is not the amount of discipline it takes, but more the path of apparent self-deprivation it follows.”

Actually, it seems that for most people, the problem is exactly the opposite, namely it’s specifically that it demands too much discipline—you can’t spend money mindlessly, you need to be persistent, and you need to make a plan and stick to it. It’s like any exercise program. In the beginning it seems hard, but if you stick to it, it becomes easier and easier, and eventually it will seem natural. If you ask a sub-8 minute mile runner, whether he feels self-deprivation running at that speed, the answer will be no. I guarantee it. So indeed, the problem is not the apparent self-deprivation, which turns out to be simply that: apparent to those who don’t know any better; but the lack of discipline.

“I also want to be free to enjoy life on my own terms. […] However, I want to be able to exercise some frivolous spending, such as a dinner out to celebrate a milestone or achievement.”

To me this sounds like going to Ruby Tuesday’s in celebration of being awarded employee of the week. It sounds like the purpose of working is to go out and spend money to celebrate having worked, very self-referentially. This, I don’t see as “my own terms”. I see that as someone else’s terms. What we’re comparing here is the ability to do THAT with “doing whatever you want, whenever you want, within reason” which is the resident definition of financial independence. “Within reason” certainly includes a dinner out to celebrate some milestone if that’s your thing.

“Part of my problem with the extreme early retirement philosophy is, I all too clearly remember my college days. [..] Money was always tight; therefore, I was always frugal. Many of my meals were pasta-based, and red meat or chicken was a rarity to be savored.”

Yes, but you’re thinking about someone with 2-4 years of experience as a student, living with other people’s random furniture, not having time to cook, not having time to do anything but studying (or partying). 2-4 years of experience is not much but it’s what most people can relate to. It’s the extent of their theory of mind.

However, imagine that you’re studying not for a degree, but that you’re always learning about new things. You’re a student of life, of skills, of art, of things, of technology, of money. Now imagine having “studied” such for 10, 20, 30 or more years. It should stand to reason that if you truly do live like a student (not those smelly college students who party and regurgitate “will this be on the test” factoids), you will be self-taught in a wide variety of things. Because of that, you can evaluate things better and you can buy one great thing every year and eventually surround yourself with luxury. Between us DW and I have 20+ years of cooking experience (from scratch, not TV dinners mind you). We can certainly outdo \$20/entree restaurants to our taste. So we eat like that. We have studied various mechanical maintenance and fabrication methods. Our furniture is not from some yard sale. It’s handmade from solid wood by yours truly. The slipcover of the couch was handmade and fitted to form. We make our own wine to taste. And so on.

My point is that the difference in mind between the earn-earn-spend-spend consumer-jobber and ERE constitutes a gap quite wide which is only surmountable by strongest theories of mind. In my experience, very few people who aren’t already entertaining such thoughts “get it”. When an article about ERE receives national coverage one should expect millions or at least several thousand people to come and check it out. However, I do not find this to be the case. Because of the lack of connection, such exposure actually results in less inbound traffic than an link from a small but compatible blog. This is why the mainstream is not particularly interesting to me. The theory gap is too wide. When it comes to changing one’s mind or developing theories of mind I actually do believe in baby steps.

Originally posted 2013-04-10 17:32:13.